Don’t tell – our national aversion to discussing personal finance

Laurie MacNaughton © 2018

As I write this I’m visiting long-time friends in Germany. Over dinner the past few evenings our conversation has turned to retirement, as within the next decade both they and I will be approaching retirement age in our respective countries.

During our discussions a couple data points have piqued my interest, including the fact that though average Germans save more than average Americans do, a 2018 survey indicates they do not have appreciably more in retirement savings. According to the survey this is largely due to the fact median incomes in Germany are somewhat lower, and the cost of living higher, than in the States. When I asked my friends about their retirement funding they pointed to their daughter and said, half-jokingly, “She’s a big part of the plan.”

But here’s a personal observation: we Americans tend to speak of retirement finances with much more judgmentalism and a much greater degree of shame and secrecy. Did your 401(k) take a big hit after the financial crisis? Tsk-tsk. Have you not saved the recommended $1.5 million for retirement? For shame. Are you considering a reverse mortgage? Don’t tell friends or family – not now, not ever.

I see the impact of this attitude played out time and time again. A homeowner encounters an unexpected event – illness, loss of a spouse, loss of employment shortly before retirement, a later-in-life divorce – and suddenly needs access to a significant amount of funds. Because we Americans do not feel comfortable openly discussing finances, for many the only option is to look to their bank for a traditional home equity loan.

But here’s the thing: let’s say the homeowner qualifies for a traditional home equity loan. For the first 29 days after closing everything seems fine – cash need solved.

However, day 30 is the kicker because now there’s a mortgage payment due. And, for some homeowners this new loan payment is on top of an existing mortgage. Even if the homeowner can juggle payments over the near term, over the long term the situation can be a recipe for disaster.

So what are some potential alternatives? First, awkward as it may be, the homeowner needs to talk to family. They’re going to know sooner or later, and these conversations do not get easier over time – nor do financial situations typically get better over time. Over the years many adult children have told me they wish their parents had been more open in discussing financial matters.

Second, the homeowner should speak with a qualified financial planner, wealth manager, or elder law attorney who can help put together a long-range financial plan.

Third, the homeowner should consider using the home as a source of retirement funding. Several options exist here, including selling the home and downsizing, renting out a portion of the home, or doing a reverse mortgage.

Money is not a moral issue, though it can feel like one. Running short on money is not a sin, though we can be made to feel it’s one. And asking for help is not a weakness, though our culture may imply it’s one.

If you have questions about how a reverse mortgage may benefit your loved one, or if you would like contact information for elder law attorneys, financial planners, or wealth managers – or just about anyone associated with aging-related issues – give me a call. I always love hearing from you.

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In-Flight Reflections Tapped Out on an iPhone

Laurie MacNaughton

Thank you, Michael P.

But maybe I should back up a bit.

This morning as scheduled my iPhone alarm went off at 3:00 AM. And as scheduled by 3:30 AM I was out the door and on my way to Baltimore Washington Airport. But that’s where the last of the morning’s plans went off as scheduled.

Even by DC standards traffic was oddly heavy for early morning, and by the time I pulled into BWI long-term parking I knew it was going to be close. Then, the terminal shuttle – which I could see from the bus stop – sat parked a good five minutes before making its rounds. However, there was still time to get my boarding pass and make it to the gate…if everything went smoothly. Which it didn’t.

For some reason every self-serve ticket kiosk was dedicated solely to members of the armed forces, meaning the backup at the service counter was tremendous – and it was not yet 5 AM.

To say I travel light doesn’t begin to tell the story: last year I packed in a book bag everything I needed for a three-week international trip. But not so for many of my co-travelers: this morning the French couple immediately in front of me apparently had prepared for the coming global clothing shortage, checking in a remarkable six suitcases – each. In front of them were first-time parents who clearly hadn’t yet learned just how few of those fancy baby accoutrements really are necessary. But finally I had my boarding pass and was free to race through the airport.

And then security.

Enough said on that front – other than the observation that if world peace ever breaks out, we should seriously consider repurposing TSA agents as speed-control personnel and altogether forego every other form of speed constraint.

By the time I finished re-robing and re-packing my electronics, I embarked on my morning’s second marathon with a growing sense of futility: by now nothing short of transformation into a photon was going to get me on my flight.

And I was right.

The plane still stood at the gate, and though the agent was able to walk onto the plane to speak with the attendant, she came back with a message I can only assume was supposed to convey something: the “final numbers were already entered.” I had missed my flight.

Over the years I have missed many flights. I have been stuck in DC traffic and gotten to the airport too late. I have been at JFK an hour early only to have my flight cancelled. I have been in international airports when gate changes were announced in English so heavily accented I couldn’t understand the announcement. I have been on Air France flights that were so late my entire connecting itinerary was useless. But never have I missed a flight when I stood in line praying my mother would live long enough for me to reroute my journey.

Now enter Michael P.

Or more precisely, thank you, Michael P, for not entering. I have your seat on American Airlines. And because I have your seat I will land a full hour earlier than I would have had I made my original flight.

I hope you’re ok – and that you have flexibility in your travel plans.

With my mother at the very end of life’s runway, life seems remarkably short. Certainly life is remarkably complex.

And sometimes, life is just remarkable.


Laurie MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant, President’s Club · Middleburg Mortgage, a Division of Middleburg Bank · 20937 Ashburn Road, Suite 115 ·Ashburn, Virginia 20147 · 703-477-1183 Direct ·